At first glance, the term “AI trading” would make many in the investment banking world afraid of bots taking over. Yet this fear is not necessary. Instead, hardworking traders will celebrate in learning the necessity of the human mind in completing the more complex and profitable trades which will remain in demand. Recent statistics have shown that 54% of American’s have personal financial exposure to equity stocks. This illustrates the popularity of passive-investing through exchange platforms for non-professionals. With the technological advancements within cryptocurrency exchanges, this ensures accuracy with superior tools to measures times to sell and buy. Non-professional traders can feel confident their money will go further in the cryptocurrency environment. When applied to the volatile cryptocurrency trading space, the added value is evident in integrating open source, pooling mechanism and customization of bots.
Traditional Investment Banking
Once virtual currency and AI bots are integrated into the investment banks, professional traders will see the benefits to their quality of work and personal health. In traditional financial trading, AI has shown benefits to human health in reducing stress. Expert traders in hedge funds and investment banks are exposed to stress and depression related illnesses due to constant market monitoring. In looking at the benefits AI bots have brought to the traditional banking world it is important to review the further consumer benefits in new economies.
Centralized banks including Bank of America, JP Morgan Chase, and others have embraced the digital assistant to aid day traders and customers. At Bank of America, virtual customer assistant “Erica” a voice and chat-driven product designed to help customers manage their financial lives. In using predictive analytics and cognitive messaging that has grown in popularity in providing customers with immediate assistance while feeding the data into the bank’s treasury of market intelligence. With her support customers can make money transfers, payments, check their balance, searching for routing number and asking other questions with a faster response. Since launching in June 2018, the service has seen more than 4 million users.
Although there are benefits compared to the option of having to call customer service, which tends to consume more time. The issue for those using bots for every day banking without the transparency of blockchain is that their data is being consumed by the bank for financial gain in exploiting the intellectual property. The valuable data is also used for improving the bot for the smartphone app, however privacy is an important factor that must be appreciated due to the monetary value in the costumer’s personal data. When many businesses in the cryptocurrency space are paying customers for their data, commercial banks must take note. The bot can bring more value to customers and the banks once a blockchain framework is integrated to ensure greater transparency.
In taking the value of AI bots a step further the cryptocurrency exchange industry has integrated predictive algorithms to ensure further financial benefit to investors. Considering the volatility in the cryptocurrency trading arena it would be wise to facilitate the use of trading bots to ensure overnight gains are secured. The popular commercial trading bots consist of Gunbot, HaasBot, Gekko, and Cryptohopper. Some of these bots are provided on an open source platform to ensure a variety of trading strategies are executed. Intel has collaborated with Rutger’s University to provide students the opportunity to compete and participate in building competing for bot trading products and other artificial intelligence devices.
Able to detect market manipulation, the AI algorithms that guide the bot provide for greater opportunity to secure a profit. As noted in Cryptohopper, where the trading platforms will accumulate data from signalers causing the hopper to execute a buy or sell order. Coindicator is one signaler that cryptohopper offers the customer, and can trade on a respected exchange of their desire i.e. Okex, Coinbase. The consumer can configure the cryptohopper to the strategy setting of their preference. The significance of giving the investor the power to make such decisions without influence by a third party will ensure they are in a position of strength that removes much stress of trusting in the knowledge of a single broker but rather a wider pool of market intelligence.
Netcentric is another case of an exchange using blockchain-based crypto trading bots. Unique to this mechanism, is that the bot can be customized according to preferred trading strategies of the customer integrating indicators such as MA, MACD, RSK and other sources of market intelligence to produce the most profitable outcome. It is also important to appreciate exchanges that fully integrate the benefits of the blockchain, as does Netcentric in its use of smart contracts to ensure the user has greater control over their account without the interference of third-party brokers wanting to exploit their investments. Such transparency is what market indicators are showing to be in greater favor among passive investors and professional day traders.
Uses a series of bots for providing accurately automated trading referred to as a Dex trading platform. By using a pooling model there is more safety for returns on investment due to sufficient capital eliminating the harm in liquidation and position funding costs. The human dimension to the product is through the constant monitoring. To further ensure protection from the market volatility of cryptocurrency “—each risk mode of Dex works with certain predefined currencies and exchanges.” The objective of the trading platform is to provide a service to the masses that do not have as much strategic insight or market intelligence to make the best trades. The bots are not foolproof at all times but support those with an interest in trading as a hobby. The confidence consumers can have in this use case is in the fact that the vault maintains surplus funds to support the liquidity of trading capital via ETH, BTC and other supply of Drops. The approach Dropil has taken is appropriate in developing a bank like a vault to ensure profit payout.
Moreover, with advancements in machine learning, AI bots will be able to advance the cryptocurrency exchange industry in providing a service once enjoyed by an elite few. Ensuring the autonomy of the individual consumer with smart contracts, the trustless alternative to the present online trading industry, will continue to see growth in popularity among the masses.
Written by Shermineh Salieh Esmati
As the CEO and founder of Cyrus BC Inc. Shermineh provides advisory services to promote the interests of her clients through the application of innovative products. One focus of Cyrus BC is to bring deliverable blockchain initiatives to the attention of investors focused on the security and socio-economic benefits of the technology.
With a background in foreign policy and intelligence analysis, Shermineh has been using her grasp of geopolitics to aid blockchain companies to best pursue growth while respecting international cryptocurrency regulations and blockchain policy. To ensure the expedited adoption of fintech products she is working with Blockchain Intelligence Group, New Economies DLT and building collaborative efforts for AI blockchain projects soon to be announced.
Shermineh has experience advising intelligence agencies, political leaders, management consultancies and human rights organizations. In the pursuit of developing an expertise in international security, Shermineh obtained her bachelor’s degree with a Specialist in Political Science at the University of Toronto and is completing her master’s degree in Government at Harvard University. To further Canada’s efforts in emerging technology she is also a member of the Blockchain Association of Canada and an Advisor to the Open Source Data Committee at the Treasury Board Secretariat in Ottawa, Canada.